As you prepare to head out to The Big Show at NRF, I thought it would be good to take a quick look back at the issues that shaped retail in 2013, what trends I see impacting retail in 2014, and what sessions at NRF might give you a leg up in tackling these issues.
2013: A Year of Transition and Execution
Many of the hot issues today, such as delivering seamless all-channel customer experiences and the rapid rise in social and mobile shopping, had their beginnings in previous years. Yet, 2013 was the year where retailers began transitioning from discovery mode to execution. Following are four areas where retailers made real headway in understanding the key issues and putting programs and technologies in place to deal with them.
All-channel consistency — Retailers began to see the importance of delivering consistent brand experiences across all channels that they serve. They began to put procedures and systems in place to develop synergy between channels. The big takeaway here was that the focus shifted from pushing products to serving customers; moving from an inward-out approach to an outward-in approach—a major shift in how retailers will have to do business in the future.
Execution at the point of purchase — To deliver all-channel consistency, retailers began to put capabilities in place to execute at a high level to satisfy customers at the point of purchase. This is to say that “execution” of the sale / fulfillment was pinnacle in 2013. In 2014 and beyond, retailers will need to not only execute effectively, but also develop purpose-built, all-channel plans and offers in anticipation of consumer behavior. Endless aisle assortments to “save-the-sale,” strategically positioned inventory across channels, and cost-to-serve operational plans driven from historical and anticipated demand patterns will all be capabilities required for success.
Big Data — One of the big opportunities in the rise of social networks and mobile shopping is the vast amount of customer data that can be mined from those interactions. Retailers began to realize that this consumer intelligence is every bit as useful in understanding buying behavior as traditional transactional data. While the techniques and technology support for mining this information are still in their infancy, the recognition of the potential for leveraging this data to predict and prepare for future purchases is very significant.
Brand Integrity — A few brand mistakes last year quickly demonstrated the power of social media and the customer’s voice to shape brand perception. They pointed out that in the age of the always-connected consumer; companies’ images are as much about doing the right things as they are about providing the right products and services. This social consciousness is ushering in a new era of conscientious capitalism that will dictate how retailers must represent their brands going forward.
2014: The Year of Transformation
In 2014 retailers must leverage and expand upon the transitional items of 2013 to transform their business model and succeed in today’s customer-centric retail paradigm. Here are seven concepts that will be critical to this process.
Brand Experience is Paramount — In the customer-centric, all-channel world, it is no longer all about the 4 Ps of retail. It is now about the 4 Cs—Connected, Collaborative, Convenience and Community. Retailers must go beyond satisfying customers at the point of purchase to delighting them at every interaction. Only in this way can they create brand advocates that ensure longer term success.
Real-Time is Imperative — With the always-connected, 24/7 consumer, change in the marketplace is happening at an exponential rate. You have to be on top of these changes in real-time if you are to have any hope of keeping up.
Mobility Manifesto — It’s not just about having flashy mobile sites, geo-location apps and mobile coupons, although those are important; it also about equipping your managers and associates with good assisted-selling mobile tools so they can better engage customers and enhance the brand experience.
Sense & Respond — While perfecting execution at the point of purchase is a good step, retailers must go beyond this reactive posture to adopt a predictive approach that constantly looks upstream to sense customers’ behavior and respond with the right products, services and offers to delight the customer.
Big Data as Enabler — Not only will Big Data enable retailers to better sense consumer buying behavior, it will also help retailers segment customers so they can more effectively respond to each segment’s needs. Better understanding customers is central to the transformation to a customer-centric business model and will enable improved collaboration and communication across the supply chain.
Channels are Dead — When you think about the implications of a truly customer-centric approach to retail, you realize that channels are dead. Now it is all about getting the customer what they want, when they want, wherever they want it. The discussion changes from channels to consumer-centric assortments, offers and delivery options. This means IT systems and distribution networks must change. You need a single database for one view of the customer and an inventory ecosystem that can fulfill all orders, not just replenish stores or ship online orders. These are huge changes, but will be absolutely necessary for success in coalescing all channels into a seamless brand experience.
Profitable to Serve — One cautionary note. Sometimes lost under the pressure to serve the new consumer across all of the new touchpoints is the fact you must do it profitably to stay in business. Careful analysis of customer segments, delivery standards and cross-channel fulfillment options must be conducted, and tough decisions made, so that in the rush to stay relevant and delight the customer, profitable operations are sustainable over the long haul.
I know this is a lot to think about and a lot of work needs to be done. So to help you get started, I recommend attending the following sessions at NRF.
Navigating Retail’s Relentless Reality: What CEOs are Doing to Thrive in a Consumer-Driven World – Get incredible insights from JDA CEO Hamish Brewer and Forbes Publisher Rich Karlgaard, based on a survey of leading CEOs by Forbes and PwC.
Reimagining Main Street – How Brick and Mortar Retail Will Thrive in the 21st Century – Hear from the president of Nordstrom’s, the world’s leading shopping center developer, and other luminaries on how to turn brick and mortar stores into vibrant gathering places with 5-star customer experiences.
A new Era of Value – Hear from Macy’s Terry Lundgren and IBM’s Ginni Rometty how data and new technology are driving a new era of value and customer engagement for retailers.
Beyond Borders – Retail Lessons in Global Expansion. While many retailers are looking to international expansion to grow their business, a 10-year study by Deloitte found that those retailers with global footprints did not outperform their domestic-only counterparts. You can learn the secrets to profitable global expansion from executives from Deloitte, Claire’s Stores and TOMS Shoes.
If you are attending NRF this year, please visit me at JDA booth #2719 to learn how JDA is tightly integrating supply chain planning and execution to help manufacturers, retailers and wholesalers profitably orchestrate a consistent, multi-dimensional brand experience in an era of synchronous shopping.
You can access the full NRF schedule here.